How Digital Transformation Influences Firm Performance: A Configurational Perspective

In the new era of the digital economy, traditional manufacturing firms are stepping up their digital transformation to remain competitive. Digital transformation might impact firm performance, resulting in a need to investigate the complex relationships between firm performance and various conditions in digital transformation. Based on resource orchestration theory (ROT), this study provided a configurational analysis of the multiple paths of organizational capability (i.e., innovation capability), organizational resources (i.e., relational resources and regional resources), and organizational characteristics (i.e., firm size and digital transformation strategy) to achieve high firm performance using a mix of fuzzy-set Qualitative Comparative Analysis (fsQCA) and Necessary Conditions Analysis (NCA) methodologies. Using data from listed companies in China's manufacturing industry, the findings identify six configurations that generate high firm performance, demonstrating the diversity in the mechanisms achieving high firm performance in Chinese-listed manufacturing firms, which can guide the implementation of digital transformation in the manufacturing industry.